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Top Hedge Fund Managers Enjoy Strong ‘09

Paulson & Co. posted another strong year as prominent hedge fund managers recovered from 2008’s disastrous losses.

Paulson, of course, had no such losses to recover from. The firm’s flagship continued its winning way, adding 14% last year. Still, for the first time since his big bet against subprime mortgages turned triple-digit returns in 2007, the Advantage Fund lagged most of its hedge fund peers, which returned in excess of 20% on average in 2009, MarketWatch reports.

Other Paulson funds did better: The levered Advantage Plus fund added 21% on the year, while its Credit Opportunities Fund—the biggest beneficiary of 2007’s bet—rose another 34%. Meanwhile, the newer Paulson Recovery Fund, the firm’s bullish face, returned 24.2%.

Other major players in the industry had a lot to make up for. Citadel Investment Group’s flagships, Kensington and Wellington, lost more than half their value in 2008. They rose about 59% last year after dipping a bit in December—through November they were up more than 60%—but the Chicago-based hedge fund giant has a long way to go to make up its 2008 losses.

Prominent activist Greenlight Capital didn’t do as well last year, but it didn’t have to. Losing just 23% in 2008, the New York-based firm easily exceeded its high-water mark last year with returns of more than 32%.

Disclosure: no possitions